Autoblog

Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper

Chris Paukert — Fri, 05 Jun 2009 13:59:00 EST

Filed under: Convertible, Coupe, Performance, Government/Legal, Supercars, Chrysler, Dodge, Earnings/Financials

In a letter from California Congressman Darrell Issa to Chrysler's Bob Nardelli, the Auburn Hills executive is charged with failing to disclose information regarding the sale of the Dodge Viper line.

According to the letter obtained by Autoblog from a source close to the situation, the Republican congressman cites Nardelli's explanation as part of the automaker's bankruptcy proceeding that there was "a lack of 'purchaser interest in response to the offering of Chrysler's Connor Avenue Viper manufacturing plant for $10 million." And yet, the letter states, "The Committee has conducted interviews and reviewed materials that clearly show there was in fact one purchaser willing to pay $35 million to purchase the Viper line."

The communication indicates that discussions were held as early as February between Chrysler's emissaries and Joseph Moch Sr. and Joseph Moch Jr. to buy all of the company's Viper-related assets. Further, an oral agreement was reportedly reached in April, with an acquisition agreement drafted later that month for $35 million - substantially more than the $10 million Chrysler was reportedly seeking for the Connor Avenue plant.

Despite the offer from Moch and apparent interest from other companies, the letter notes that Chrysler only reported a single bid for its Viper business to the bankruptcy court's Judge Arthur Gonzalez - the much smaller $5.5 million offer from Devon Motor Works reported last week. In the letter, Congressman Issa warns Nardelli:

"Failure to make this disclosure may have been illegal if you knowingly made false statements in response to questions under oath."

Perhaps the central question is: Why would Nardelli and Co. fail to disclose the Moch offer? Issa's letter offers a theory:

As you know, the Fiat group includes Ferrari, a Viper competitor in the sports car market. If it is the case that Fiat used its "hard-fought" superior bargaining position to establish as a condition of the merger a requirement that Chrysler allow the Viper brand to disappear in order to reduce competition for Ferrari, this too must be presented to the court.

Issa goes on to urge Nardelli to "disclose all legiimate offers for Viper to the court at the hearing," (which is slated to occur today, June 5) as well as "all records and communications between Chrysler and its agents with Joseph Moch Sr., Joseph Moch Jr., and their legal representatives."

So... did Nardelli and Chrysler really fail to disclose more lucrative offers for the Viper - possibly because of pressure from new parent Fiat? Stay tuned.

Congressional letter alleges Nardelli and Chrysler failed to disclose more lucrative offer for Viper originally appeared on Autoblog on Fri, 05 Jun 2009 13:59:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

BREAKING: Marchionne confirmed as post-bankruptcy Chrysler CEO

Noah Joseph — Thu, 07 May 2009 11:15:00 EST

Filed under: Hirings/Firings/Layoffs, Chrysler, Fiat

After weeks of speculation, Fiat confirmed today that its CEO, Sergio Marchionne, will assume the same role with Chrysler once it exits bankruptcy. According to statements from the Obama administration, Chrysler could emerge from "surgical bankruptcy" in as little as 30 to 60 days, after which Chrysler's current chief executive Bob Nardelli will step down and Marchionne will step in.

A dual Canadian and Italian citizen, the Ontario-educated Marchionne is credited with turning the Fiat Group around from a money-losing enterprise into one of the largest and most successful automakers in the industry. After taking over the helm at Fiat five years ago, Marchionne said he would need to double its sales to 5.5 million units annually in order to make the company financially viable. His vision for separating Fiat, Lancia and Alfa Romeo out of their parent company and into a new auto group together with Chrysler (and potentially with GM's European and Latin American assets) would make it the second-largest automaker in the world, with 6 million cars produced annually. The bulk of the debts, however, would remain with the shells of their former organizations, leaving the new one unencumbered and free to regroup. There's no further news at this point as to when Chrysler will emerge from its Chapter 11 proceedings, allowing Marchionne to step in, or how the reported Treasury Dept. regulations will affect Marchionne's salary, but we can expect to hear plenty more on this highly-rated executive and his vision for reshaping the auto industry in the very near future.

[Source: The Detroit News | Image: Giuseppe Cacace/Getty]

BREAKING: Marchionne confirmed as post-bankruptcy Chrysler CEO originally appeared on Autoblog on Thu, 07 May 2009 11:15:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

REPORT: Fiat's Marchionne could replace Nardelli as Chrysler CEO in management shake-up royale

Noah Joseph — Mon, 13 Apr 2009 13:27:00 EST

Filed under: Hirings/Firings/Layoffs, Chrysler, Earnings/Financials, Fiat

If you were surprised by the "resignation" of GM chief Rick Wagoner late last month, get used to the idea. Chrysler reportedly has some major management changes in store as well, including a new seven-member executive board including representatives from Fiat and the Obama administration's automotive task force. But while Bob Nardelli may stay on to chair that board, Chrysler's next CEO may not even be American. Sources close to the ongoing negotiations between Chrysler LLC and the Fiat Group suggest that part of the new arrangement could see Fiat CEO Sergio Marchionnne taking the top job at the Detroit automaker with which he's jumping into bed.

Sound crazy? Not as crazy as you might think. The architect of Fiat's impressive turn-around from a struggling conglomerate into one of Europe's biggest automakers, Marchionne is a Canadian citizen and was educated just a hop, skip and a jump away from Detroit in Windsor, Ontario. Further, he holds court twice a month at the suburban Chicago offices of Fiat's agricultural subsidiary, Case New Holland. Obama has publicly praised Marchionne's management, which could see him take a hands-on approach to running the two allied companies similar to how Carlos Ghosn, another highly rated European automotive executive, runs Nissan and Renault.

Chrysler and Fiat have until the end of the month to iron out a plan, but it may be more complicated than straight-up bilateral negotiations, as several third parties also figure into the mix. First is Cerberus Capital Management, which owns a majority stake in Chrysler at the moment. Next up is Daimler, which is still locked in negotiations with Cerberus to offload its remaining stake in Chrysler. After throwing in representatives from the United Auto Workers, some of America's biggest financial institutions (many not faring much better than Chrysler themselves) hold several billions in the company's debt. Sure, Marchionne may get the job, but he's going to have one heck of a time getting all this sorted out.

[Source: Automotive News - subs. req'd]

REPORT: Fiat's Marchionne could replace Nardelli as Chrysler CEO in management shake-up royale originally appeared on Autoblog on Mon, 13 Apr 2009 13:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

That was fast: Chrysler and Fiat agree on partnership framework of a global alliance

John Neff — Mon, 30 Mar 2009 13:48:00 EST

Filed under: Europe, Chrysler, Fiat

Not long after the President concluded his televised press conference today, Chrysler released a statement saying that it and Fiat have already reached an "agreement on a framework of a global alliance".

The President announced that the U.S. government would supply Chrysler with sufficient capital (up to $6 billion) to operate for 30 days while it pursues a partnership with Fiat, but apparently Chrysler was farther along in its talks with Fiat than the President and his Auto Task Force realized. While terms of the arrangement have not been revealed, we do know that Fiat will provide Chrysler with product, platforms and technologies, as well as potentially use existing Chrysler manufacturing facilities to build its own vehicles in the U.S. In exchange, Fiat will get a stake in Chrysler that the administration has demanded will not become a controlling stake until the automaker has paid back all of the federal loans it received.

Follow the jump for Chrysler's official statement and stay tuned as more details about the Chrysler/Fiat hook up are revealed.

UPDATE: Chrysler has released a corrected statement that says it's only agreed with Fiat on a "framework of a global alliance," but that no deal with the Italian automaker to partner up has been made yet. So they've basically agreed on what a Chrysler-Fiat mashup would look like, but not on whether they're going to do it.

[Source: Chrysler]

Continue reading That was fast: Chrysler and Fiat agree on ~~partnership~~ framework of a global alliance

That was fast: Chrysler and Fiat agree on ~~partnership~~ framework of a global alliance originally appeared on Autoblog on Mon, 30 Mar 2009 13:48:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

BREAKING: Bush greenlights $17.4 billion Auto Rescue/Bailout package

Chris Paukert — Fri, 19 Dec 2008 09:32:00 EST

Filed under: Government/Legal, Chrysler, GM, Earnings/Financials

President George W. Bush will doubtlessly be remembered for many things things, but his parting legacy may yet be his eleventh-hour pledge of $17.4 billion in low-interest loans to General Motors and Chrysler (Ford Motor Company has said it does not require relief at this time).

The funding will reportedly come from the Troubled Asset Relief Program (TARP), the financial industry bailout package signed off on this fall. Up front, the White House will earmark $17.4 billion in short-term financing for December and January, and in February, another $4 billion will be disbursed, provided it can draw the funds from the second half of TARP's $700 billion.

More details are doubtlessly coming, but the bridge loans appear to hinge largely on whether General Motors and Chrysler are deemed "viable" enterprises by the government. In the terms of the agreement, that means that the automakers must prove whether they have a "positive net present value, taking into account all current and future costs, and can fully repay the government loan." There's no word yet on how they will prove said viability, but we expect to learn more soon. In the meantime, expect for both General Motors and Chrysler to stick to their previous production suspension announcements.

Politico has more specifics on the bailout here.

UPDATE: Press releases from General Motors, Ford and Chrysler have been added after the jump.

[Sources: ABC NEWS, Politico, Photo by Brendan Hoffman/Getty]

Continue reading BREAKING: Bush greenlights $17.4 billion Auto Rescue/Bailout package

BREAKING: Bush greenlights $17.4 billion Auto Rescue/Bailout package originally appeared on Autoblog on Fri, 19 Dec 2008 09:32:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Nardelli: New fuel efficient model might be out next year

Chris Shunk — Fri, 01 Aug 2008 11:58:00 EST

Filed under: Budget, Green, Hatchback, Chrysler

Click above for high-res gallery of the Dodge Hornet concept

Besides the introduction of the Dodge Challenger, there has been very little good news coming out of Chrysler lately. Sales are down 22% for the year due to a lineup that's still heavy on trucks and SUVs, but there may be some help on the way as soon as 2009. Chrysler CEO Bob Nardelli has hinted that a fuel efficient new vehicle(s) could debut next year, and platform sharing with other automakers would be behind the quick turn-around. Nardelli says the Auburn Hills-based automaker has re-prioritized its capital in an effort to quickly get to market the fuel-efficient vehicles that the market demands. Debuting even a single vehicle that's more fuel-efficient than anything else in the Chrysler lineup would likely have a big effect in light of the fact that its brands offer some of the least fuel-efficient lineups in the industry.

Nardelli didn't give any details as to which vehicle could arrive ahead of schedule, but speculation is that the Dodge Hornet is on the short list. The handsome Hornet (if it looks like the concept) will be based on the Nissan Versa small car platform, and was originally slated to arrive in Dodge guise in 2010. Chrysler is also rumored to be working on alliances with Tata, Fiat, and Chery, and each automaker has plenty of small, efficient vehicles at its disposal. None of those automakers has a presence in the U.S., though, so a quick turnaround on a platform that hasn't been properly crash tested doesn't seem likely.

Gallery: Dodge Hornet Concept

[Source: Detroit News]

Nardelli: New fuel efficient model might be out next year originally appeared on Autoblog on Fri, 01 Aug 2008 11:58:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Chrysler cutting 1,000 white collar workers

Chris Shunk — Wed, 23 Jul 2008 18:22:00 EST

Filed under: Hirings/Firings/Layoffs, Chrysler, Dodge, Jeep

Chrysler is losing money by the truck-load, and its vehicles aren't selling, so common sense dictates that team Pentastar was going to start making cuts soon. That time is now, when Chrysler notified workers that it would be cutting 1,000 white collar workers. Chrysler spokesman David Elshoff told employees that the company would achieve its cut target through retirements, attrition, and buyouts, which means people won't be handed boxes and receive security escorts just yet. Chrysler management is making the cuts with the belief that the current economic situation here in the States isn't going to improve any time soon. A quick look at the Pentastar's car lineup shows the privately owned company would be in trouble even if the economy had a rosy outlook. No timetable was given for the white collar cutback.

[Source: Detroit News]

Chrysler cutting 1,000 white collar workers originally appeared on Autoblog on Wed, 23 Jul 2008 18:22:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Nardelli returns to work after back injury

Chris Shunk — Mon, 09 Jun 2008 13:02:00 EST

Filed under: Etc., Chrysler

Chrysler LLC chief Bob Nardelli is back to work after being laid up with a bad back the past couple of weeks, and here we didn't even know he was hurt. Some bloggers we are. Nardelli's injury didn't require surgery, and the Chrysler CEO worked from home while getting the rest needed to tend to Chrysler's turnaround plan. A Chrysler spokesperson didn't disclose how the injury occurred, but we're guessing the massive weight of the Pentastar's problems would be a hefty strain on anyone's back.

[Source: Freep]

Nardelli returns to work after back injury originally appeared on Autoblog on Mon, 09 Jun 2008 13:02:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Chrysler turns museum into non-profit, asks dealers for donations

Chris Shunk — Tue, 06 May 2008 08:33:00 EST

Filed under: Etc., Chrysler, Dodge, Jeep

Chrysler's over-sized dealer-body has been struggling with the Pentastar's shrinking market share, but that's not stopping Chrysler brass from asking them for donations for the newly non-profit Walter P. Chrysler museum. Dealers are being asked to contribute $5,000 apiece to help keep the museum up and running, and in turn Chrysler is changing the museum's name to the Walter P. Chrysler Founding Dealers Society. Dealers that participate in the program will get their name added to the Founding Dealers Society Donor Wall.

While it's well-known that Chrysler is working hard to shrink non-core costs, the 70-vehicle museum only has six full-time employees, which doesn't meaningfully impact the bottom-line. The program is strictly voluntary as well, so no dealers will be unwillingly hurt during the funding of this museum.

[Source: Automotive News - Sub. Req.]

Chrysler turns museum into non-profit, asks dealers for donations originally appeared on Autoblog on Tue, 06 May 2008 08:33:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Chrysler execs doing house calls

Chris Shunk — Sun, 04 May 2008 11:32:00 EST

Filed under: Car Buying, Etc., Chrysler, Dodge, Jeep

If you have a Dodge Ram in the driveway and someone claiming to be Jim Press calls you asking if you're satisfied with your truck, it just might be him. Chrysler recognizes that it has a customer service problem, and the Pentastar is going to extraordinary lengths to correct it. Its top 300 executives and directors are participating in a program called "Customer First" that puts a priority on -- you guessed it -- the customer. The executives, even guys named Nardelli, Press, and LaSorda, are responsible for at least one customer call per day, and all execs will man at least one shift at Chrysler's customer call center.

The Pentastar elite are also partaking in a three month competition to see who can generate the most sales. We don't know what the prize is for the winner, but whomever claims top sales should get something really, really good. Like a lifetime supply of Chrysler Sebrings.

[Source: Detroit Free Press]

Chrysler execs doing house calls originally appeared on Autoblog on Sun, 04 May 2008 11:32:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

New York 2008: Nardelli promises aspirational vehicles from Chrysler

Frank Filipponio — Wed, 19 Mar 2008 10:08:00 EST

Filed under: New York Auto Show, Chrysler

We are just back from the kickoff keynote speech for the 2008 New York Auto Show and have to wonder where in the Big Apple we can score some of what Bob Nardelli is smoking. While his words sounded somewhat encouraging, they were about three months old for the most part and didn't sound terribly convincing to most ears. He outlined Chrysler's 4-point plan for the future, telling the assembled breakfast-seekers that enhancing the core, extending business, expanding the market, and executing flawlessly are the keys to Chrysler's future. OK, sure. That could apply to just about any enterprise. Using the company's global assets to reduce redundancies is obviously going to help, cutting non-profitable models and reducing the number of options and packages makes a lot of sense, too. His main focus was on product, pointing out that designing and building "aspirational" products was vital to getting people back into the Chrysler fold. We can understand how that leads to something like the Challenger, but the Journey doesn't seem like it meets that criteria as well. Maybe the briefly mentioned Grand Voyager and a Cherokee with a "special" roof will surprise us later today. We shouldn't be too hard on Nardelli and Chrysler, as the company is working on turning itself round. Unfortunately, this company's got a large turning radius.

New York 2008: Nardelli promises aspirational vehicles from Chrysler originally appeared on Autoblog on Wed, 19 Mar 2008 10:08:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments

Cerberus gives reasons why Chrysler could flop

Dan Roth — Tue, 19 Feb 2008 09:31:00 EST

Filed under: Etc., Chrysler

Cerberus Capital Management shot off a nine-page letter to investors outlining ways that Chrysler could sink, while also pointing out that they believe Chrysler's on the track for success. Some of the possible failure scenarios include a nasty recession, an extreme slowdown in the car market, or a further credit downturn. Credit is already looking green around the gills, and the potential for a widespread domino effect that starts with an implosion of the teetering mortgage business would be catastrophic for Chrysler Financial and GMAC, of which Cerberus owns 51 percent. As easy mortgages and equity go, so goes willy-nilly new car purchasing, and we're probably already seeing the results of that adjustment. Cerberus believes that it can weather a mild credit downturn, and even a mild recession, just fine.

One way to attain success is to declare it, and changing the definition doesn't hurt, either. Cerberus optimistically declares that there's no need to be heroes to earn a good return on their investment. It sounds a little bit like they're saying it's okay to tread water. Stating that it's not necessary to build Chrysler up, even though that's the underlying hope, Cerberus thinks that just hanging in there should be good enough to earn a return. All of Chrysler's employees must feel great knowing that Bob Nardelli, Jim Press, and Tom LaSorda can essentially just keep the company coasting along until Cerberus sells Chrysler off so it can collect that mythical return. Chrysler's performance is so far outpacing expectations, and the company does have cash on hand. Those are actual, concrete good signs that Chrysler could yet emerge from its chrysalis.

[Source: Detroit News]

Cerberus gives reasons why Chrysler could flop originally appeared on Autoblog on Tue, 19 Feb 2008 09:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

Chrysler says it will meet new CAFE standards

Dan Roth — Thu, 13 Dec 2007 11:26:00 EST

Filed under: Green, Chrysler, Earnings/Financials

Detroit's sharp intake of breath over the very real possibility of increased federal fuel economy standards apparently doesn't include Chrysler's voice. CEO Robert Nardelli has told The Car Connection that rather than waste lots of time and energy opposing the likely increase to a 35 mpg fleet average, Chrysler will put its head down and get it done. Attaining the goal will not be without pain, however. Cuts will be made, and the books are still in the red.

There is hope, though, if Chrysler and parent Cerberus Capital can stick it out. A new contract with the UAW eases some of the automaker's financial burden, allowing that money to be plowed into development of more fuel efficient vehicles. There's a new two-mode hybrid system, co-developed with Daimler, GM, and BMW, which should help lift the fleet average without Chrysler abandoning their bread and butter moneymakers. With a lineup heavy in less-frugal vehicles like SUVs, trucks, and minivans, Chrysler's acknowledged the holes in their product mix and will set about plugging product into the voids. First up is the new Journey, the company's first crossover vehicle. The CUV segment is red-hot right now, so having a model to sell is a plus. Having a good model that will continue to sell well is an even bigger plus. At this point, Chrysler's facing an uphill climb.

[Source: TCC]

Chrysler says it will meet new CAFE standards originally appeared on Autoblog on Thu, 13 Dec 2007 11:26:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

VIDEO: The Nardelli era begins with more questions than answers

Chris Shunk — Tue, 07 Aug 2007 11:37:00 EST

Filed under: Hirings/Firings/Layoffs, Plants/Manufacturing, Chrysler

Chrysler has been through more changes in the past six months than any automaker in recent memory, and the announcement of former Home Depot CEO Bob Nardelli as Chrysler's head honcho is just another sign that the auto business in Detroit is rapidly changing. Nardelli was booted unceremoniously at America's home improvement store due to poor stock performance and an outlandish executive salary. He has no automotive experience, but he's the guy Cerberus wanted to lead Chrysler now and in the future. Former CEO Tom LaSorda is staying onboard the Pentastar as vice-chairman and President, and he'll continue to lead the crucial UAW contract talks.

Follow the jump for more analysis and video of Nardelli's press conference.

Continue reading VIDEO: The Nardelli era begins with more questions than answers

VIDEO: The Nardelli era begins with more questions than answers originally appeared on Autoblog on Tue, 07 Aug 2007 11:37:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments